Failing to Act

How Rick Scott’s Policies Are Hurting Floridians

By Tiffany Germain
Posted on October 7, 2014, 11:15 am

Endnotes and citations are available in the PDF and Scribd versions.

Despite an improving economy, too many families are still struggling to make ends meet. They are seeing their cost of living increase while their wages stay stagnant. At the same time, corporate profits are skyrocketing. Given these trends, it is difficult to determine why some elected officials fail to pursue policies that would create an economy that works for everyone, not just a select few. Instead of focusing on policies that would invest in working- and middle-class families, they adhere to failed trickle-down economics mantras that lavish big corporations and wealthy individuals with more tax breaks—leaving everyone else to fight over what is left.

Florida Gov. Rick Scott (R) is one such politician. During his tenure, Gov. Scott has pushed for tax cuts for big corporations but has failed to act on issues that affect working- and middle-class families. His positions are outside the mainstream and have adverse consequences for working Floridians, especially those within the state’s communities of color. For example:

Gov. Scott has opposed raising the minimum wage, even though 55 percent of Floridians support raising it to $10.10 per hour. His failure to raise the wage to $10.10 means that 1.7 million Floridians—including 357,000 African Americans and 536,000 Hispanics—are missing out on $2.1 billion in higher wages. It also forgoes $1.3 billion in economic growth. Additionally, raising the minimum wage would save the state money. By putting more money into the pockets of working Floridians, 195,000 people would no longer need the Supplemental Nutrition Assistance Program, or SNAP, formerly known as the Food Stamp Program. This would save Florida $295.1 million each year.

Gov. Scott also now refuses to expand access to health coverage for Floridians through Medicaid, despite the facts that Florida has the third-highest uninsured rate in the nation and Floridians support expanding Medicaid by a 12-point margin over those who oppose it. Gov. Scott’s failure to act means 764,000 working Floridians fall into the Medicaid coverage gap, including 214,000 African Americans and 200,000 Hispanics. This failure is costing the state 63,000 jobs, $66 billion in additional federal funds, and $20 billion in Florida taxpayer money that is going to other states to fund their expanded Medicaid programs.

Additionally, Gov. Scott is a climate denier, even though Florida is one of the most at-risk states from the damaging effects of climate change and Florida voters are less likely to support a candidate who denies that man-made climate change is real. His failure to act means most of South Florida will be completely washed away by the end of the century, according to current forecasts, and risks $9 billion in lost tourism by 2025 and $40 billion by 2050. Hispanics in particular will feel the effects of climate change, since about half of the state’s Hispanic population lives in South Florida counties.

Since Gov. Scott came into office in 2011, he has pursued the same, failed trickle-down economic policies, instead of an agenda that would create an economy that works for all Floridians. The state’s corporate tax rate was already exceptionally low, but the governor slashed education spending and cut tax rates. He also established “some of the deepest and most far-reaching cuts in unemployment benefits in the nation” to pay for corporate tax breaks. These actions prove that the average Floridian is paying the price while Gov. Scott hands more money to big business.

Raising the minimum wage

While wages have mostly stagnated, the cost of living continues to increase. This gives hard-working Floridians less money to spend, creating a downward economic cycle. Despite Florida’s growing income inequality gap, Gov. Scott lamented Florida’s vote to raise the wage as “a real problem,” because raising the wage “basically gives people an incentive not to hire people.” During his run for re-election, Gov. Scott has repeatedly dodged answering questions on the minimum wage.

Due to Florida’s 2004 law that ties the minimum wage to inflation, Florida’s minimum wage is currently slightly higher than the federal wage. However, $7.93 per hour is still well below what families in Florida need. According to the Massachusetts Institute of Technology, families in Orlando need $51,854 per year to meet minimum standards of living. In Orlando, the average cost of housing each month for a worker with two children is $1,052, while the average cost of food is $536. These costs are significantly higher than the $16,494 per year—or $1,374 per month—that a full-time minimum-wage earner in Florida makes under the state’s current minimum wage.

Raising the minimum wage to $10.10 per hour would have huge economic benefits, providing Floridians who work hard with the opportunity to get ahead, not just get by. More money in the pockets of workers means more money goes back into the economy, leading to more customers for businesses, more jobs, and a stronger economy. The impact would be significant in Florida, since the state has the second-highest number of minimum-wage earners in the country. Increasing the minimum wage to $10.10 per hour would benefit 1.7 million Floridians, who would receive more than $2.1 billion in additional wages. This would spur more than $1.3 billion in economic activity.

In particular, raising the wage would have huge benefits for the state’s communities of color. In general, people of color constitute a larger share of minimum-wage earners than their share of the overall workforce. According to the Economic Policy Institute, 357,000 African Americans and 536,000 Hispanics would be directly or indirectly affected by raising the wage to $10.10 in Florida.

Raising the minimum wage will not only benefit workers and the local economy, but it will also reduce overall taxpayer costs. Specifically, it will lower government expenditures on nutrition assistance and reduce participation in the Supplemental Nutrition Assistance Program over the next 10 years. A state-by-state Center for American Progress analysis found that 164,426 to 195,813 Floridians will no longer need SNAP, saving taxpayers an estimated $295.1 million annually.

Increasing the minimum wage makes economic sense for Florida. Yet despite its popularity, benefits to working families, and ability to grow the state’s bottom line, Gov. Scott has not supported an increase to $10.10 per hour. Instead, he continues to push a cycle of trickle-down policies that work against the average Floridian.

Health care and closing the coverage gap

The Sunshine State has the third-highest share of uninsured individuals in the country, with 20 percent of Floridians—or 3.9 million people—lacking health coverage in 2013. Gov. Scott denied access to health coverage for more than 1 million uninsured Floridiansby failing to expand Medicaid, despite the fact that Floridians support expanding the program by a 12-point margin over those who oppose it. Gov. Scott previously supported expanding Medicaid but gave into pressure from the Florida Legislature and conservative outside groups, such as the Koch brothers-backed Americans for Prosperity.

Under the Affordable Care Act, or ACA, the federal government provides 100 percent of the funding for states to expand Medicaid through 2016 so that more low- and moderate-income working families can gain access to affordable health insurance. After 2016, the federal contribution declines slightly to 90 percent. The provision expands eligibility to people who live below 138 percent of the federal poverty level, or $26,347 for a family of three and $15,417 for an individual. Under current Florida law, if workers make more than $6,809 for a family of three, they do not qualify for Medicaid. While the Supreme Court upheld the constitutionality of the ACA in the summer of 2012, it also ruled that states could choose to opt out of Medicaid expansion.

This decision not to expand Medicaid has real consequences for people. As a result of Gov. Scott’s failure to act, 763,890 Floridians fall into a “coverage gap”—meaning they earn too much to be eligible for the traditional Medicaid program but do not earn enough money to qualify for tax credits in the health exchange or marketplace, pricing them out of the health insurance system. Gov. Scott’s failure to act also has a disproportionate effect on people of color, more than 54 percent of whom comprise the coverage gap in Florida. Specifically, 214,000 African Americans and 200,000 Hispanics would gain coverage if Florida expanded Medicaid.

Earlier this year, Charlene Dill, a 32-year-old mother of three, collapsed and died as a result of a heart condition. At the time, she was at a stranger’s house for a sales appointment—one of the three part-time jobs that she worked to try to make ends meet for her family. Dill was uninsured and went years without the care she needed to address her chronic conditions because she could not afford it. If Florida, with the leadership of Gov. Scott, expanded Medicaid under the ACA, Dill would have had access to the care she needed. Unfortunately, similar to thousands of other Floridians, she fell into the coverage gap.

Gov. Scott’s refusal to expand Medicaid is costing the state billions of dollars in lost federal funds. According to a joint report from the Robert Wood Johnson Foundation and the Urban Institute, Medicaid expansion would bring more than $66 billion in Medicaid funding to Florida over the next 10 years—more than any other state. Another recent analysis by the Urban Institute found that as a consequence of not accepting federal Medicaid funds, $20.1 billion in Florida taxpayer money is going to fund other states that are expanding the program.

Refusing to expand Medicaid also means forfeiting thousands of new jobs and hurting the state’s economy. Those with health insurance are far more likely to visit the doctor on a regular basis, instead of relying solely on emergency care. This increase in medical services not only brings in federal dollars but boosts tax revenues by an increase in hiring and by health care staff keeping longer hours. This leads to indirect spending and the expansion of the economy, according to Michael Morrisey, a health economics professor at the University of Alabama at Birmingham. In fact, refusing to expand Medicaid means sacrificing at least 63,000 new jobs in Florida from 2014 to 2017.

Expanding Medicaid would not only help more than 1 million Floridians gain access to quality health care coverage but also would boost the state’s economy, bringing in more than $66 billion in federal dollars over 10 years. But Gov. Scott has failed to put his political weight behind the issue, instead letting the Republican state legislature lead and hurting the state’s physical and economic health.

Climate change

Florida is one of the states that is most at risk from the damaging effects of climate change. The state’s exceptionally flat landscape and porous limestone foundation already make the region particularly vulnerable to sea-level rise. The National Climate Assessment, an annual report on the state of climate change, found that rising seas, increased temperatures, and more devastating climate impacts will affect every part of the United States. But the predictions for Florida are particularly dire: If current forecasts for sea-level rise pan out, most of South Florida will be completely washed away by the end of this century.

In fact, Florida is home to 7 of the United States’ 10 cities that are most at risk of flooding. Globally, Miami has the fourth-largest population vulnerable to rising sea levels. Three feet of sea-level rise—just half of the rise predicted for this century—would submerge more than one-third of South Florida. At six feet of sea-level rise, more than half of the state would be underwater. A recent report by the Risky Business Project expects the state to sustain $15 billion to $23 billion in property damage due to flooding by 2015, with up to $208 billion worth of property underwater by 2100. Gov. Scott’s $9.2 million mansion sits only 200 feet from the water in an area where the ocean has risen nine inches in the past century and is expected to rise at a much faster pace this century. If no action is taken, even the governor’s home will likely be underwater.

Unfortunately, Gov. Scott has refused to act on climate change and even denies the science behind it. Scientists overwhelmingly agree that human-caused climate change is occurring, but the governor said in 2010 that he has “not been convinced” climate change is happening. More recently, he has dodged questions on climate science, instead saying he is “not a scientist,” a common response from politicians who skirt responsibility for taking a stance on this issue.

Florida voters are inclined to punish politicians with Gov. Scott’s stance: 44 percent are less likely to support a candidate who denies that man-made climate change is real, compared with the just 28 percent who are more likely to support the candidate. In addition, nearly 8 in 10 Florida voters supporting limits on carbon pollution, a leading contributor to the greenhouse gas emissions that are causing global warming. Due to the imminent threat of sea-level rise and the governor’s inaction, four counties—Broward, Miami-Dade, Monroe, and Palm Beach counties, whose combined population totals more than 5.6 million Floridians—have formed the Regional Climate Change Compact, a coalition dedicated to responding to the effects of climate change and informing funding decisions at the state and federal levels.

In particular, refusing to act on climate change will have a huge impact on the state’s communities of color. The four counties that formed the Regional Climate Change Compact are also home to a significant portion of the state’s Hispanic population. In fact, half of Florida’s Hispanics live in just four counties: Miami-Dade, Broward, Palm Beach, and Orange, three of which are on the South Florida coast. The National Climate Assessment also warns that some communities of color are especially vulnerable to extreme weather events.

Gov. Scott’s refusal to act on climate change will have devastating economic effects on the state, since Florida’s economy is so directly tied to tourism and its coastal setting. More than 87 million people visited Florida in 2011, making it one of the top travel destinations in the world. Visitors spurred more than $67 billion in economic activity that year, but the state is at risk of losing $9 billion in tourism revenue due to climate change by 2025, with $40 billion at risk by 2050, according to the National Climate Assessment.

Gov. Scott has effectively been silent on how Florida should prepare for the effects of climate change, despite the real and imminent consequences for the state. His position is also extremely unpopular, forcing communities to take matters into their own hands. Without action, Florida stands to lose billions of dollars.

Conclusion

As governor, Rick Scott has eschewed policies that invest in the middle class and those who aspire to it and that would create an economy that works for everyone. In fact, he has done the opposite. His failure to act on issues such as raising the minimum wage, expanding access to health care, and addressing climate change hurt working- and middle-class Floridians.

In particular, Gov. Scott’s policies disproportionately affect communities of color. Raising the minimum wage would affect 357,000 African Americans and 536,000 Hispanics, or more than 50 percent of those who would benefit from an increase to $10.10 per hour. Meanwhile, 54 percent of those who fall in Florida’s health care coverage gap are people of color. Accepting federal funds to expand Medicaid would allow 214,000 African Americans and 200,000 Hispanics to gain coverage. Moreover, South Florida—where more than half of the state’s Hispanic population resides—is at extraordinary risk for the impacts of climate change, with one-third of the state expected to be underwater by mid-century. Yet Gov. Scott has not taken action to raise the wage to $10.10 per hour, expand access to Medicaid, or effectively mitigate the impacts of climate change.

Gov. Scott’s stances on these issues are not only outside the mainstream, but they also have real consequences for working- and middle-class Floridians. Policymakers need to create an economy that works for everyone, not just the wealthy few. Pursuing a failed top-down economic agenda, like Gov. Scott does, will not accomplish that goal. Instead, policymakers should focus on policies that grow the middle class. In addition to raising the minimum wage, extending federal unemployment insurance and expanding the Earned Income Tax Credit could alleviate the increasing burden on the middle class.

Tiffany Germain is the Research Manager for the CAP Action War Room at the Center for American Progress Action Fund.

The author would like to thank Tony Carrk and Kristen Ellingboe for their assistance.